Do You Need Account Managers — Or Salespeople?
As a local VAR and MSP, we’ve always had account managers at our business to drive new business and maximize the engagement with our current client base. In considering if my business should have account managers or salespeople, I’ve come to realize that it all hinges on WHAT you’re selling the most of: Products or Services?
If you are selling mostly products, you need a sales staff, not account managers. They are hunters who enjoy the thrill of the chase and are therefore compensated on the size of the sales they bring to you. They are not interested in long-term relationships, they want to conquer client objections and bring home the prize. Then move on to the next one. Salespeople are doers and are goal-oriented, which is what makes them successful in finding and closing new business.
If you are selling mostly services, you need account managers. Some call them farmers or gatherers. Selling services means you are selling your expertise and building long-term relationships. “Trusted advisor” may be an over-used term, but it is the goal that you are trying to achieve. As that trusted advisor, you have the ability to foresee the needs of your clients and proactively plan future upgrades and additional solutions to meet their needs. You are in a great position to leverage your full solution set and narrow the number of vendors with which your clients engage.
With a team of account managers, the number one salesperson bringing in new clients should be you, the business owner. No one else is going to be able to talk owner-to-owner better than you and land the deals that take extra time and effort. Bringing in new clients yourself also means that your client will have a relationship with YOU, keeping client loss to a minimum when you experience account manager turnover.
Do you have account managers or salespeople in your business? How is that working out for you? Are you contemplating a change?
David Bellini is president of ConnectWise. Monthly guest blogs such as this one are part of MSPmentor’s annual platinum sponsor program. Read all of Bellini’s guest blogs here.
So you are saying the CEO or business owner should be the one ‘selling’ to potential customers? I politely disagree…If the CEO is focused on selling, then they are not focused on their primary role of strategic direction for the business. Sure, the business owner may get involved time to time for larger opportunities, but I would say it should be a small percentage of deals where the CEO/business owner is engaged. That’s why you hire exceptional Sales executives who can sell to decision makers and don’t require the assistance of the CEO. Now on the flipside, if we’re talking about a micro-sized MSP then the CEO wears multiple hats and may be heavily involved in garnering new business, but even so, you can’t focus on your business and experience growth if you’re working within the trenches of your business.
Martin/David,
You both make great points about selling and this is hot topic. After 5 years of running the sales department (predominantly Managed Services) at Compuquip Technologies I came to realize that Sales people do not drive the most managed services sales, its been the seasoned account manager, the director of services, or me as the manager that brought deals in. But, to be honest, many of our biggest deals came down from a relationship from our CEO. But to your point Martin its not necessarily the CEO’s main goal to drive ALL of the sales (unless like you said its small shop..then everything is CEO’s responsibility).
But instead of trying think of “sales” like we did when we were all break/fix companies or product driven companies, we should look at similar professional services firms as a model for our we should “sell” our services. ..
Think of the last time you met with a new Accounting firm or Law firm. You didn’t speak with a sales person, right? You spoke with a partner of the firm. And you didn’t hear of the firm by getting a cold call, did you? Most likely heard of them through referral.
So the typical “Sales” person who applies for sales jobs probably is not the person who will close your next 2K, 5K, 10K, or especially 20K Monthly Recurring Revenue contract. Its the MSP equivalent of a “partner” in a law firm, which for many MSPs is ultimately their Executive Management. We, as MSPs, should try to model ourselves after those types of sales models because after all, we’re professional services firms now. Not box pushers or break/fix companies.
I wrote a blog about this exact topic on March 17th and received great feedback through email and twitter. Would love to get both your thoughts. http://ow.ly/4r9VK
Brian
Formerly at Compuquip Technologies
Now at BrightGauge Software
Brian is 100% correct. I often tell my staff that we are professional service firm just like an Accounting or a Law Firm. I am the lead partner in my firm and I like to be the first face a qualified prospect will see.
As far as our size. we are a 14 person MSP firm with 4 Account Managers. With the CEO position being the only “sales person”. I agree; we could not scale much larger unless we bring in another partner. Just like a Law firm or Accounting Firm, we would need to bring in another partner.
I agree that in a services business, account management is more important to growth and customer satisfaction than sales, however a sustained sales effort is critical as well. If you want to grow faster than you can personally close deals you will need sales people. Yes, adding partners is a way to scale some sales effort, but it is at the cost of ownership and autonomy. Sales people can be hired and fired far easier than adding and removing partners.
I recommend a balanced approach that scales an account management team in proportion to the number of clients being managed and a sales team based on the desired growth and market opportunity.
Hi Folks: Thanks for driving a dialog here. I can only comment from a media company perspective. I’ve seen some great media salespeople in my time… but some of them focused on getting the sale “today” and booking the revenue “now” without really thinking about the long-term business relationship with the customer. The end result: Short term revenue spikes ultimately gave way to long-term customer losses. Within our own company, we’re always thinking about long-term relationships.
-jp
Mitchell, I think you’re right but I can’t imagine you’re talking about growing and closing Managed Services deals (if you are, I’d love to hear how you’re doing it. it might help others as i think everyone has this in the forefront of their minds).
But talking about Managed Services (monthly recurring revenue) growing a sales force, I believe, is not the best investment to grow your business. Managed Services is a value sale and trust has to be built from the start, similar to that Law Firm and CPA firm.
And that’s where a traditional sales role fails. You put a sales person in front of a client and that client is already thinking about pricing and discounts (similar to how you feel when you try to buy a new car). That’s not good when you’re working on Managed Services deal. You put that same client in front of a COO, Director, CEO, Partner, etc then the conversation starts differently and will end differently. And that difference we feel is higher margins, better quality clients, and happier clients.
At Compuquip we decided to sacrifice ‘growth’ for higher quality, higher margin clients. And since i know size of company makes a difference we have over 50 employees with a strong and growing managed services revenue number. I’d say 4-5 people in Compuquip do a majority of the “selling”.
Great topic David. Thanks for bringing this up!
Hi David, Brian…
I love you guys, but I’m not sure that I completely agree with some of these generalized statements, although, admittedly, we are often the oddball in any given group. Having said that, our product sales have been steadily on the increase and are 4X what they were three years ago, but it’s not super low-margin business. This has come largely from relationship selling via our sales guys. It hasn’t been about landing the big deal and moving on to the next BBD (bigger amp; better deal). It’s been about finding the right clients, who want to work with a trusted advisor. Sure, they are expecting to pay a fair price but not necessarily the lowest price based on our value-add.
This doesn’t mean that we have abandoned our managed services practice. It continues to grow as it always, particularly as we move clients onto our Private Virtual Data Center. (I didn’t want to use the “c” word.) This is the fasted growing part of our business today and, while we have “hunters” looking for new clients, a number of these opportunities have come from our sales guys, who had previously only been selling products amp; projects. In fact, this has helped us to “swim upstream” a bit, if you will. The sales cycle has been a little longer but we’re seeing our average managed customer size to be on the increase. Once upon a time, our average managed clients size was about 20 seats. Now, our last three “on-boards” have been 50+. Two of those came from the previously mentioned “sales guys”.
So what’s the CEO’s role? Yes. I absolutely need to be involved in sales but, mostly, I am out properly positioning our company in the geographies where we do business, setting our strategic direction, and making sure the train stays on the rails. Of course, I meet every new potential client… shaking hands amp; kissing babies…and making it personal, which I love to do. But I’m not the one who is really out shaking trees or closing the deals.
After all, for years, everyone (including you guys) kept saying that we need to be “working on the business – not in the business”. I don’t want to go back to making the growth of the business dependent on me. I don’t scale that well. 🙂
Cheers
– Rory
I think everyone is pitching successful approaches here and the information is great. We are taking an approach closer to Rory in this discussion. We are selling products first to clients in order to sell our services later. Products are an easy lead into the account and it starts the trust factor. The client only expects to see the sales person on these deals. Also as an MSP it gives us a “trial” period to test out this client, is this a quality client or are they potentially going to be a pain in everything from receiving payment and how they treat our staff. So yes use sales people to make those initial connections and use your partners and CEO’s to close the major Manged services deals. So find some cool products!
Good day..
Steve